Gauging the role of Forensic Data Analytics in an era of digital transformation

The global landscape has been continuously evolving, coupled with rising geopolitical concerns, market volatility and cyber-attacks. There has also been a significant rise in enforcement, highlighted by the Foreign Corrupt Practices Act unit receiving 30 voluntary disclosures when the pilot program was in effect during the 18 months, vis-a-vis 18 cases in the previous period. Emerging markets such as India and ASEAN have showcased improvements around regulatory enforcement by formulating new regulations and amending existing ones.

In this era of digitization, data is steadily become the new engine driving businesses. It is thus imperative to leverage technologies such as Forensic Data Analytics (FDA) and understand its complete potential to transform risk functions within organizations. We recently hosted a webinar to discuss the relevance of FDA for organizations globally and how it could help in early fraud detection and deterrence.

The webinar commenced with introductory remarks from Arpinder Singh, Partner and Head – India and Emerging Markets, Fraud Investigation & Dispute Services, EY, covering key developments around regulations and enforcement action in emerging markets. He stated that data protection and privacy have become one of the most vexing risk areas, affecting the bottom line of organizations. The use of new technologies such as FDA advancements, particularly Artiﬁcial Intelligence (AI), machine learning and automation can help businesses ramp up their risk functions in a whole new way. Going forward, organizations will need to adapt to newer technologies to be compliant with the upcoming General Data Protection Regulation (GDPR), build specialized skill-sets within teams for a deeper understanding and use new age technologies extensively as they will continue to be in demand in the near future.

We then moved on to discussing the key findings of EY’s Global Forensic Data Analytics Survey 2018. When compared to the previous EY FDA surveys, the results showed an increased investment by organizations in emerging technologies such as robotics and AI. We saw that cross functional collaboration was still a challenge; strong governance would be instrumental to overcome issues around integrating data sources and teaming up between different departments. The survey also highlighted that most organizations are not using FDA in their GDPR compliance efforts. It is important to note that organizations that incorporate data protection and privacy compliance in their FDA strategies can gain a competitive edge over those that choose to avoid it due to the cost and regulatory concerns.

The webinar was concluded addressing interesting questions from the audience. With time, data protection has become important from an investigative standpoint, especially during cross-border investigations. Organizations need to clearly define a ‘Bring Your Own Device’ or BYOD policy if employees are using office assets, ascertaining that official information is accessed on personal devices only with the legal team’s consent. Arpinder further highlighted that emerging technologies can be used in compliance programs to deter false positives, while robotics can be used to enhance third-party due diligence. AI and robotics can help in getting faster results by recognizing fraudulent patterns and trends, which were done manually before. Another point raised was how data residing with companies tends to largely be in an unstructured format – here, FDA can be leveraged to detect fraud or anomalies to a large extent and manage risks by using certain keywords or measuring voice sentiments, thereby making it more structured.